Changes in trading on the MSE under MiFID II

The revised Markets in Financial Instruments Directive, MiFID II, took effect on the the 3rd of January 2018. MiFID II has brought about several changes which impact trading on the Malta Stock Exchange ("MSE"), namely:

Iceberg Orders, Hidden Orders and Midpoint Orders will no longer be available for the local market in order to improve trade transparency

Trading in ALL Maltese Equities will follow the new Tick Size rules, as set forth by the EU Regulation 2017/588. Specifically, equity tick size will be determined by 2 criteria: Price Range and Liquidity Band. The table below illustrates this classification

Tick Size Rules - EU Regulation 2017/588

Liquidity Bands

Price Ranges

0≤Average number of transactions<10

10≤Average number of transactions<80

80≤Average number of transactions<600

600≤Average number of transactions<2000

2000≤Average number of transactions<9000

9000≤Average number of transactions

0≤price<0.1

0.0005

0.0002

0.0001

0.0001

0.0001

0.0001

0.1≤price<0.2

0.001

0.0005

0.0002

0.0001

0.0001

0.0001

0.2≤price<0.5

0.002

0.001

0.0005

0.0002

0.0001

0.0001

0.5≤price<1

0.005

0.002

0.001

0.0005

0.0002

0.0001

1≤price<2

0.01

0.005

0.002

0.001

0.0005

0.0002

2≤price<5

0.02

0.01

0.005

0.002

0.001

0.0005

5≤price<10

0.05

0.02

0.01

0.005

0.002

0.001

10≤price<20

0.1

0.05

0.02

0.01

0.005

0.002

Source: Commission Delegated Regulation (EU) 2017/588 of 14 July 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards on the tick size regime for shares, depositary receipts and exchange-traded funds

Based on existing liquidity levels, all local equities, except for Bank of Valletta plc ("BOV"), fall into Liquidity Band 1 (BOV falls into Liquidity Band 2). For example, Simon Farsons Cisk plc falls into Liquidity Band 1 and within the Price Range of 5≤price<10. This means that the applicable tick size is 0.05. Hence, only prices of 8.50, 8.55, 8.60 etc will be accepted. Order prices of 8.51, 8.53, 8.565 will be rejected. Below are the tick sizes currently applicable to the Equities listed on the MSE, these may change over time, depending on the price range and average daily volume.